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Submission to Productivity Commission Inquiry:The Workplace Relations Framework
Workplace Relations and Resources Productivity:At Work on Chevron’s Gorgon Project
Bradon EllemProfessor of Employment Relations
The University of Sydney Business School
March 2015
Submission to Productivity Commission Inquiry:The Workplace Relations Framework
Workplace Relations and Resources Productivity:At Work on Chevron’s Gorgon Project
Executive Summary
The resources sector, or at least the unionised sections of it, has been the focus of much media debate and political commentary for many years. Few workplaces have attracted as much attention in this context as Chevron’s Gorgon project off the north-west coast of Australia, on most counts the largest ever private sector investment in Australia. It seems to have very serious problems, problems which, if shown to be true, go the heart of the concerns of the Productivity Commission’s inquiry into workplace relations.
Originally costed at USD37 billion, the Gorgon budget is now running at more than USD54 billion. Originally scheduled to have ‘first gas’ in 2014, there are growing concerns about delay, with 2015 as the most optimistic start-up date. Shell, one of the project’s joint venture partners, believes the date could be at least 2016.
In the statements of local Chevron managers and business lobby groups and in most media accounts, there is a simple explanation of the project’s cost and delay problems. The cause, it is said, lie mostly in low productivity, pro-union labour law and aggressive unions representing over-paid workers. One way or another, labour – be it workers themselves or their unions – is to blame. Is this an adequate explanation? The short answer is: no. This kind of explanation lacks any credibility. This submission suggests the common explanations are more about blame-shifting than genuine analysis. The problems lie in the management of such projects.
Even a quick reading of the agreements covering the workforce will raise questions about some commonly quoted wage numbers, not least the infamous cook making AUD350,000 (USD326,445). The argument about wages-driven cost blow-outs is misconceived for three reasons: first, many of the claims made about wage levels are greatly exaggerated; second, wage increases were part of the original agreements; third, maritime wage costs make up only one per cent of the estimated project cost. This means that even if the most inflated claims about wage figures were correct, they still would not go close to explaining a cost blow-out of 46 per cent of the original estimate; they cannot account for anything like the USD17 billion increase.
What of delays? These, of course, do explain some of the cost increases. But how do we account for delays themselves? Assessing the argument about attributing delay to the workforce requires us to analyse the nature of the project and the performance of work itself, as this submission does. It draws on focus groups and interviews which revealed structural problems around the relationship between client and contractors, internal red-tape, safety flaws, delays and waste.
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Much public comment from resource industry lobbyists and media commentators paints the workforce, particularly the maritime workers, as so industrially destructive that they are threatening not only the long term viability of the project but the LNG sector itself. The focus groups provide us with a very different picture: the workers express high levels of commitment to the job and to the sector’s long term success. The success of this and other LNG projects was critical to them. They explicitly argued that it was important that they do a good job on Gorgon to enhance their own, and the sector’s, future prospects.
The accounts from the workforce describe fundamental problems on the project and of scores incidents large and small which the workers say explain the problems with cost and time.
The ‘big ticket’ problems and continuing sources of concern have included:
Combi-Dock III (a vessel which has roll-on-roll-off capacity and also serves as a dock) being impounded for two months by the Australian Government after coming adrift and hitting an Australian submarine, HMAS Sheean. The company and its insurer paid about $10 million compensation.
International vessels delayed at Barrow Island, unable to discharge cargo because of lack of space in the lay-down areas. As one worker reported: ‘So for each day if you take into account what one vessel would cost in a day and sometimes it can be up to $400,000 or $500,000 a day’.
Reports of major delays at sea, in some cases, a whole swing of 35 days. In the words of one seafarer: ‘the vessel hasn’t moved, the guys have literally sat on the back deck. They might be chipping and painting and there’s only so much painting you can do on the vessel ... there is no productive work for them to do for ... that whole five weeks’.
Workers also report, sometimes through ‘leading-hand logs’, on more routine delays that have marred the project. Among many:
Complexities imposed by the quarantine requirements for all material brought onto Barrow Island. Foreseeable or not, these environmental requirements at times mean that whole barge loads need to be re-treated.
Dozens of stories of loads being re-lashed, often because of competing instructions from different contractors,
A five-month period where skilled assembly workers had to fill in paperwork simply to get the right size of bolts.
Compulsory wearing of US-mandated safety harnesses which are irrelevant because of higher standards on Australian scaffolding.
In just one (randomly-selected) week, one leading-hand log included entries such as: ‘not quarantine compliant’; ‘incorrect manning levels because wrong plan’; ‘change in vessel allocation – no plan’; ‘cargo re-allocated: insufficient equipment – steps tagged out’; ‘wind delays as per manufacturer’s specs’; ‘excessive barge movement could not install ramps’; ‘no truck movements – no traffic control’.
The most commonly circulated media stories about the Gorgon project have not considered these and other workplace perspectives presented here. They have not considered the possibility that there may have been problems with the project’s management from the
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beginning, as the companies set about their work in the Australian environment, on an isolated and complex construction site. They have not examined the experiences of the workforce, but, rather, seem to have assumed that workplace relations, the workers and their unions are the problem.
If the standard explanations for the project’s problems are flawed, then this raises significant questions about how the cost and time difficulties should be addressed. It follows logically from what is presented in this submission that somehow ‘fixing’ workplace relations will not solve the problems; neither will blaming the unions. The logic of this submission also means that management needs to recast its thinking: if Gorgon’s problems are simply and continually attributed to the workers, then there would appear to be little prospect of work performance, management practices and contracting arrangements being changed on this project or others. Meantime, neither Chevron nor the partners and contractors appear to see themselves as in any way accountable for the failings on their project. In short, both the evidence presented here and the pattern of blame-shifting raise questions about management practice and management accountability. More broadly, this suggests that much of the public debate about workplace relations is misconceived. Among other things, too much of this debate assumes – and does not demonstrate that workplace relations are flawed and then, no less worryingly, assumes that fixing workplace relations is a silver bullet for the very complex and general problems faced by business and the community in equally complex economic settings.
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Submission to Productivity Commission Inquiry:The Workplace Relations Framework
Workplace Relations and Resources Productivity:At Work on Chevron’s Gorgon Project
1. Introduction
The resources sector, or at least the unionised sections of it, has been the focus of much
media debate and political commentary for many years. Arguably, it is only rivalled by the
commercial building and construction industry and the waterfront as a site of supposedly
inefficient and potentially calamitous industrial relations. Curbing ‘third party intervention’
and, more specifically, limiting costs, are held up as vital for improved local and national
productivity – and indeed for maintaining high levels of inward foreign investment.
Few workplaces have attracted as much attention in this context as Chevron’s Gorgon project
off the north-west coast of Australia, on most counts the largest ever private sector
investment in Australia. It seems to have very serious problems, problems which, if shown to
be true, go the heart of the concerns if the Productivity Commission’s inquiry into workplace
relations.
Originally costed at USD37 billion, the Gorgon budget is now running at more than USD54
billion. Originally scheduled to have ‘first gas’ in 2014, there are growing concerns about
delay, with 2015 as the most optimistic start-up date. Shell, one of the project’s joint venture
partners, believes the date could be at least 2016.1 Chevron’s Gorgon liquefied natural gas
(LNG) project is one of the world’s largest resource projects, and the single most expensive
ever undertaken in Australia. Pitched as central to a massive expansion of energy production
for both Chevron and the Australian economy, Gorgon’s national and corporate significance
can indeed hardly be overstated. It has been estimated that in its first 30 years, Gorgon will
add AUD65 billion (USD60 billion) to national GDP.2 The project is part of a major shift in
global energy production as the LNG industry meets an ever greater share of rising global 1 Australian Financial Review, 15 March, 2014: Shell casts doubt over Gorgon timing.2 Former Minister Martin Ferguson drawing on ACIL Tasman’s data. http://www.forbes.com/2009/09/14/chevron-gorgon-investment-markets-commodities-natural-gas-australia.html
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energy demands and which has massive potential for Australian business and workers. The
increasing proportion of exploration and production in the Asia-Pacific region, as opposed to
the more established sites in the Middle East, poses fundamental questions about the
development of new projects on time and on budget.
The Gorgon project is a complex one – whatever the regulatory context. The construction site
for gas trains is on Barrow Island, about 100 kilometres off the coast, hundreds of kilometres
from the main population and assembly centres. Accommodation for the workforce as well as
the sites infrastructure is all new. The construction work is taking place in a nature reserve
with strict quarantine processes for all materials brought onto the site. The island is an
extremely windy site and open to major sea swells. Parts and materials are shipped from Asia
and the major local port nearly 1600 kilometres to the south; huge pipe-laying vessels work
offshore to connect the gas-fields to the Island. Dozens of contracting companies work with
and for the joint-venture partners.
Cost blow-outs and time delays are more common than not on megaprojects. Nonetheless,
each instance needs to be contextualised and explained. The dominant narrative about
Gorgon has been largely framed by Chevron and much media coverage in terms of problems
imposed by Australian workplace relations laws and by one particular union, the Maritime
Union of Australia (MUA). As recently as 6 April 2014, the Managing Director of Chevron
Australia, Roy Krzywosinski, told an industry conference that wages for some classifications
had doubled since 2008, reaching up to $400,000: ‘This wage growth is what is currently
crippling Australian industry and is simply not sustainable. Rising labour costs are hampering
competitiveness, and combined with low productivity, will ultimately cost jobs’.3
The typical narrative focuses on union wage demands and poor productivity with government
failings, in terms of workplace relations legislation and cumbersome bureaucracy, also in the
mix. Although various complex logistical aspects of the project are also alluded to at times, it
is usually the workers who are at the centre of lobby group and media attention. Simply put,
they are being blamed, as is the set of laws that allegedly protects them.
3 Quoted in Reuters: High-cost Australia May Miss $180 bln LNG Expansion Wavehttp://www.gulfoilandgas.com/webpro1/MAIN/Mainnews.asp?id=34770
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This focus on workers and unions is wholly inadequate and indeed quite misleading. This
kind of analysis overstates the impact of workplace relations, the law and wage costs. It fails
to explain project delays. This way of seeking to understand the Gorgon project makes no
attempt to explore the nature of work itself. Furthermore, this logically means that neither
Chevron nor the partners and contractors see themselves as in any way accountable for the
failings on their project.
This submission takes a different approach in coming to grips with the Gorgon debate. It
examines the nature of work organisation on the project. It draws on publicly available data
and original focus group and interview research. It draws on workers’ accounts from the
project’s assembly sites, wharves and ships to assess the project’s problems. The findings
here are suggestive of the need for further original qualitative research as well as still wider
use of the extensive material collected thus far. This submission begins by presenting a brief
context in which to situate the project. It argues that most of the public discussion
misconceives the nature of the problems and that in fact more questions than answers arise
from a close assessment of those arguments. The submission provides extensive material
from focus group and interviews in which the experience of the workforce is presented at
some length. In turn, this material raises further questions for any investigation into the
project’s problems.
2. Alternative perspectives
Before presenting the original findings of this submission, there are several ways in which the
both the study and the Gorgon project itself should be framed. These contexts challenge the
simple and often misleading way the issues are often presented. They should be taken into
account when assessing the management of the Gorgon project. Three matters are especially
important: the general context of megaprojects; other evidence in the debate in Australia; and
what we know about the project’s wages.
(i) Megaprojects
Megaprojects run over time and over budget much more often than not:
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The John Grill Centre in Australia reports that 65 per cent of the world’s major
engineering projects fall down, be it in terms of schedule, cost or quality. (It is worth
noting that the founder of the Centre, John Grill, was the founder and CEO of Worley
Parsons, one of the country’s largest engineering service companies and provided the
single biggest donation to the University of Sydney to establish this centre for project
management.)4 The Centre’s overview of project problems highlights: ‘a failure to ask
the right questions of strategic fit, risk and return’ and ‘deficiencies in leadership
practices, collaborative engagement and strategic and design thinking’.5
A Perth-based consultancy, RISC, drew on data from Wood Mackenzie, a British firm
specialising in energy, metals and mining research, to argue that the average cost over-
run on major oil and gas projects was 98 per cent. In Australia, the average was
(merely) 30 per cent. The consultancy also says that currency fluctuations can be
problematical: their analysis puts the Gorgon cost increases in US dollars at nearly
twice the level of Australian dollars.6
Professor Bent Flyvbjerg of the Said Business School at Oxford University, one of the
world’s leading researchers and consultants in this field, shows that nine out of ten
projects have cost overruns; across 70 years there have been no improvements in the
accuracy of cost-estimates. In his book, Megaprojects and Risk (with Nils Bruzelius,
and Werner Rothengatter) and elsewhere, Flyvbjerg argues that psychological
explanations (‘optimism bias’) and political and economic ones (‘strategic
misrepresentation’) are the key explanatory variables in cost over-runs. Costs are
routinely underestimated; revenues are routinely overestimated. 7
The Business Council of Australia identifies three major drivers of project costs:
problems with planning and procurement, partly because of optimistic scheduling;
4 Quoted in Sydney Morning Herald, 24 October 2012: Magnanimous magnate gives $20 million to university5 See http://sydney.edu.au/john-grill-centre/about/need.shtml6 Resource Investment Strategy Consultants quoted in Australian Financial Review, Human touch adds to costs, 27 May 2013, p. 8. 7 Flyvbjerg, B, Bruzelius, N, Rothengatter W, Megaprojects and Risk: An Anatomy of Ambition. Cambridge: Cambridge University Press, 2003. A presentation summarising this work and similar studies can be found at:https://www.youtube.com/watch?v=gEXWULGEvs8
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complex government regulatory processes; the workplace relations system.8 One might
contest these explanations but here the relevant point is simply that statements by
Chevron and others focus on only one of these three – the workplace relations issues –
failing to examine the dynamics of the project itself.
In sum, these and other sources tell us that over-promising and under-delivering are structural
features of, and endemic, to megaprojects. This leaves us with the problem of explaining the
particular features of this general phenomenon: that is, the local contours of the Gorgon
project.
(ii) Reservations about Gorgon?
Others involved with, or analysing, the Gorgon project recognise that the reality of the
Gorgon project is more complex than blaming the workers or the national regulatory
framework. For instance:
Generally speaking, returns on oil and gas are somewhat problematic at present:
existing oil and gas fields are running lower; exploration costs are rising partly because
new sites are remote; profits are under pressure with relatively flat prices; oil prices
have been roughly flat for about three years; expensive projects (such as Gorgon) are
yet to deliver product.9
We know from statements made in March 2014 that Shell has its own concerns about
the delays. The Australian Financial Review reported that Royal Dutch Shell had
‘classified Gorgon in an investor presentation as a project starting up in “2016-2018”’.10
There is anecdotal evidence that many of the contractors and managers themselves have
concerns about the overall management of the project. While undertaking a first round
of this research, I was contacted by several such individuals with concerns similar to
those expressed by the workforce. Typically, however, commercial constraints or the
need to retain work in the sector limit their willingness to speak on record.8 Business Council of Australia, Securing Investment in Australia’s Future: Report of the Project Costs Task Force, BCA, 2013: page 3.9 See http://www.news.com.au/finance/business/chevron-profit-plunges-on-lower-production/story-e6frfkur-1226904043523: Chevron profit plunges on lower production: 3 May 2014.10 Australian Financial Review, 15 March, 2014: Shell casts doubt over Gorgon timing.
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(iii) Wage structures
Wages are governed by enterprise agreements between employers and employees to which
unions may become a party. Agreements were typically made in 2009, locking in wage rates
since then. Employers are concerned about a new round of agreements when these expire but
here the relevant issue is the available evidence about what those wages are.
Much publicity centres on maritime cooks being paid $350,000 yearly but the agreements
show that the rate is typically $128,601 paid to a chief cook. Over 40 pay-slips and tax
returns provided to me failed to yield up the $350,000 cook.11
There are different rates of pay on some specialist vessels but the point remains that in
seeking to explain the cost blow-outs on this project, wages simply cannot be considered part
of the problem. Others may wish to address questions of increases under new agreements, or
of comparative worth in jobs, but for the purpose of examining the cost and time problems on
Gorgon, maritime wages – or indeed wages overall – are simply not a major component.
Even if the claimed wages figures were correct, they could not account for the $17 billion
blow-out. BIS-Shrapnel has shown that wages of maritime workers on the project account for
less than one per cent of the total project cost.12
3. Re-assessing Chevron’s Gorgon Project
The starting point for looking carefully at the problems with Gorgon cannot logically lie with
the wages. Not only are they too small a component of the cost but they cannot be
characterised as an unexpected cost. Likewise, other explanatory factors, while important, do
not of themselves explain delay, unless there were flaws in original planning. That may well
be the case – and several interviewees suggested just that – but it is difficult to evaluate this
claim without internal company data.
11Agreements can readily be found on the Fair Work Commission’s website.12 BIS Shrapnel, Implications of Wage Costs on the Offshore Oil and Gas Marine Support Sector, 2013.
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The Gorgon project is certainly marked by geographic, environmental and logistical
complexities. The construction site on Barrow Island, 100 kilometres off the coast, lies
hundreds of kilometres from main population centres with their labour supplies and industrial
infrastructure. The main gas-fields are much further out to sea. Parts and materials are
shipped from the major port nearly 1600 miles to the south; huge pipe-laying vessels work
offshore to connect the gas-fields to the Island. Dozens of contractors work with and for the
joint-venture partners. The island itself is a Class A (state protected) Nature Reserve with
strict quarantine processes for all materials brought onto the site. The island is also an
extremely windy site and open to major sea swells.
To repeat, it is difficult to assess the extent to which, in this particular case, the sorts of issues
identified by Flyvbjerg and his colleagues might explain the original costings and timelines.
In October 2013 Roy Krzywosinski himself told a Western Australian parliamentary inquiry
into Floating Liquefied Natural Gas Operations that the company had underestimated the
project’s difficulties. His statement is worth quoting at some length because it gives an
insight into the project that is somewhat different from the more public and more common
focus on labour:
there is no doubting the fact that being on not just a class A nature reserve but an
island resulted in some challenges because you are limited in your supply chains and
marine vessels and boats and things of that nature to deliver materials. We just did not
see the productivity in getting our equipment and material up to the island. That was a
real problem. We got the infrastructure in place, what we call a fly camp or a
construction village, started mobilising people, anticipating that we were going to
have the material to feed the workers so they can actually start completing their work
scopes. What we found is that it was just much more difficult to get what we would
call the tonnage and the volume of material up to the island to feed the workforce so
that they could be productive. As a result we had some logistics issues impact the
productivity in the whole project.13
13 Economics and Industry, Standing Committee, Inquiry into The Economic Implications of Floating Liquefied Natural Gas Operations, Transcript Of Evidence Taken At Perth Thursday, 24 October 2013. http://www.parliament.wa.gov.au/Parliament/commit.nsf/(Evidence+Lookup+by+Com+ID)/B9E5E2351682CE6148257C1200264A83?opendocument
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Similarly, a few months later in December 2013, when announcing new problems, several
likely causes were highlighted:
Chevron has cited the high Australian dollar, high wages, low productivity, weather
delays and the logistical challenges of building a gas plant on Barrow Island, a Class
A nature reserve as the major reasons for the delays and cost overruns.14
These are interesting sets of insights but they are uncommon in the discussion of the project.
The major issue is, as has been suggested, much more likely to be cast in terms of the
workplace relations system, wages and unionism. The Australian newspaper summed up
Krzywosinski’s underlying concerns with labour thus: ‘restrictive work practices, which have
encouraged union activism on worksites’.15
The task in the following sections, the core of the submission, is to examine in detail what
workers themselves have said in focus groups and interviews. The purpose here is to shed
more light on how the structure of the project and the nature of work have contributed to
delays and cost over-runs. These sections present, with brief contextual introductions,
accounts which are mostly in the workers’ own words, illustrating potentially high-cost items
and daily problems.
This research approach raises, of course, the issue of the credibility of the workers’
responses. The striking element of this matter was the depth of the engagement with thinking
about the project. From the workers’ perspective, if they did their jobs well, then that would
set them up as employees for the next job. Two typical statements from different workers
sum up this way of thinking:
There's that .... thought of the next contract, the next job, the next big thing, Wheatstone
or whatever. That was what everyone was aiming for, to be able to make it work…
If you win more contracts and more jobs, there's no need to go anywhere else.
14 http://www.abc.net.au/news/2013-12-12/gorgon-gas-project-cost-blowout/5151982, 12 December 2013: Chevron reveals second Gorgon gas project cost blowout15 http://www.theaustralian.com.au/top50/2013/roy-krzywosinski/story-fnhacdow-1226585191828#sthash.bwaI1Z0x.dpuf. See also more from Krzywosinski himself at note 3 above.
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This focus group exchange also makes this clear:
Worker: It’s the best job I've ever had, but the most frustrating
Facilitator: Frustrating because that's your job security?
Worker: Yeah. In order for it to work, we had to make it work.
The next section will address some of the obvious ‘big ticket’ items that the media and
workers raised before moving in the next to a series of examples of everyday problems which
illustrate why it is that the workers believe that there are fundamental flaws in the project.
4. The ‘big ticket’ items
Some of these matters can be dealt with quickly because they are already on public record.
They are all very significant contributions to both cost and delay, and, obviously, these sorts
of problems are not the ‘fault’ of the workforce.
4.1 The Barrow Island jetty
In June 2012, a number of media outlets reported that the jetty and other marine structures
had, in Australian dollar figures, ‘more than doubled in cost to $1.85 billion’. This was a
major undertaking, including the jetty itself (at over 2,000 metres in length), lifting facilities,
pens for tugs and various navigation aids. The consortium had initially estimated the cost
$800 million. This soon became $1.1 billion. Leightons then announced that the figure had
been increased to $1.85 billion. CEO Hamish Tyrwhitt attributed this to ‘weather challenges’
and difficulties with fabrication and transportation.16
16 This account is from http://m.perthnow.com.au/business/gorgon-jetty-blows-out-to-185bn/story-e6frg2qc-1226397417406, dated 16 June 2012.
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4.2 Combi-Dock and the submarine
In July 2013 the Australian submarine HMAS Sheean was hit by a vessel chartered to the
Gorgon project, Combi-Dock III. The latter was impounded for two months by the Australian
Government. The company and its insurer, agreed to pay up to $10 million.
This matter came up in a focus group discussion with stevedores. The workers reminded each
other of this incident – one they considered to be a low-point in the project – and a very
expensive one. The last speaker all but captured newspaper headlines from memory:
- [It] blew across the wharf onto one of our Navy subs and caused $13 million damage.
- How many million do you reckon that would have cost, then?
- It was about $13 million, I think.
- [Headline:] ‘Boat left mooring, comes out and slams into Australian submarine,
causing $13 million of damage’.
4.3 Sustained delays at sea
Seafarers provided several examples of delays which they regard as endemic to the project.
They take different forms and arise for different reasons but, plainly enough when combined,
they are constitutive of major delays and additional cost imposition.
One matter which was often referred to in differing contexts was lack of space in the lay-
down areas on Barrow Island. As one source said:
We had vessels up there, international vessels, at Barrow Island, not discharging
cargo because they had nowhere to put the cargo. So for each day if you take into
account what one vessel would cost in a day and sometimes it can be up to $400,000
or $500,000 a day with the vessel being loaded it could be sitting there for three
months at a time.
And again:
We had one occasion where we went up there, arrived up at Barrow Island, and were
told there was no room at the docks for us, so we sat out at anchor for a week.
13
Another time we went up there, got in, and docked, and then were told that there was
another ship that was more important so we sat there for two days and had nothing
taken off the ship at all. Just sat there waiting for them to get around to getting to us.
Others talked about major delays at sea, in some cases, a whole swing of 35 days. Seafarers
reported delays ‘on the pick [anchor]’ on vessels, speaking of whole swings [rostered
periods] of four or five weeks in which none of the planned work was done. In the words of
one seafarer:
So for 35 days the vessel hasn't moved, the guys have literally sat on the back deck.
They might be chipping and painting and there's only so much painting you can do on
the vessel. But there is no productive work for them to do for that four - for that
whole five weeks. Now, that's not because our guys are saying we refuse to sail,
we've refused to tow a barge, we refused to - they're not refusing to do anything. It's
just that there is no work that is provided for them.
These allegations point to significant wastage in labour and fuel costs as well as delay, as
suggested by this exchange, in the claim that materials are at times sent back to the Australian
Marine Complex at Henderson and unloaded. (This is the port outside the major port of
Fremantle where the barges are loaded to transport materials for the construction site at
Barrow Island.)
Worker 1: No there’s no room on Barrow Island.
Worker 2: There was no room on island so they spent two days going around the
island…
Worker 3: Towing the barge around.
Worker 2: …towing the barge around two days and then they said we’ve got no
room, send them back to Henderson ... they load it up for Barrow Island
it gets taken up there because obviously [the stevedore company] wants
to get it up there as well, there’s no point – send it up there, there’s no
room on Barrow Island to unload it so they just keep towing it around
Barrow Island ... circling for two days.
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Worker 1: Then bring it back down here again. There’s no room so they have to
send it back up there ... that’s because they [the company] gets paid
when they get it off the dock.
5. At work on the Gorgon project
This section outlines just some of the dozens of examples which emerged in discussions. The
topics covered begin with claimed problems with getting onto the job itself and then move to
discuss on-the-job regulation and the complexity of the contacting arrangements.
5.1 Getting to work
One of the concerns commonly voiced by industry sources is about inefficiencies, or ‘red
tape’, interfering with work performance. This is usually attributed to governments or unions.
However, on a complex project such as this, there is necessarily a great deal of ‘bureaucracy’
generated by and within the companies themselves. These administrative complexities begin
with the process of getting on the job itself. As do some other resource sector employers in
Australia, Chevron has all the contractors use Enterprise Risk Management Solutions
(ERMS) to hire employees. ERMS coordinates between employers and workers and
organises transport and inductions.
Many sources claim that the system is too cumbersome for dealing with the exigencies of
maritime work: it has been suggested that even when crew are ready to go (and the immediate
employer is happy), delays in crewing take place. Delays were noted in the early stages.
According to one senior union official:
We've had instances where ... ERMS have told the contractors that they can't get hold
of referees, but the referees saying that they've never been contacted by ERMS.
Particularly in the start-up phase of the project it was a complete disaster ... where
there's mobilisation of a lot of people in a relatively short period of time ... so that's ...
probably where a lot of the inefficiencies start ... an employer that has a critical
labour shortage can't get people onto the project.
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Because the physical geography of the project requires a fly-in-fly-out labour force, there is
no doubting the complexity and cost of supplying labour to the site. However, many workers
resent the hold of ERMS over their travel arrangements:
Particularly at the start up phase of the project where you've got limited flight
schedules, we're having employees sort of mucked around no end. So it was causing
the employer a lot of difficulty, because they couldn't book the flights to suit the
employee and it was causing our members a lot of difficulties, because instead of
getting home at a timely hour, they were getting mucked around at Onslow Airport, or
down in Perth, because ERMS, which was bureaucracy second to none, that were
booking their flights. It was very difficult for them to ring up and change flights that
were clearly wrong, because there was a third party involved.
They couldn't just pick up the phone to the employer and say look, can you change the
flights back to something that actually works? For guys on the east coast, they've
been away for weeks and the last thing they want to do is sit at the airport for an extra
eight hours.
Once hired, the employees have to be inducted, occasioning time delays in itself and
frustration among experienced workers:
You've got an induction process that lasts two weeks. Now, we're talking about, in
some cases, construction workers that have been working on construction sites
around the country for 30, 40 years. The last thing that they need is a two-week
induction process, being told how to do their job.
5.2 Safety at work
The induction processes, of course, put a high priority on workplace health and safety (WHS)
as on any resources project. However, the very complex safety provisions and processes and
the overlap between contractors and workers’ own experiences make for an unhappy mix.
New and experienced workers have to be familiar with the safety policies and procedures in
Chevron itself and with the many contractors. Workers claim the processes are often
unnecessarily cumbersome.
16
In this overall context, cynicism abounds, as this union interviewee makes plain:
I can point to those volumes of black folders sitting there, that would only be 10 per
cent of the OH&S policies and procedures that our members on the Gorgon Project
have to comply with. Yet somehow our guys have to understand them and to follow
them. But they're there basically to be used a sacking tool against our members. So
when it's convenient, something goes wrong, it's very easy for the employer to drag
one of those policies out saying, well, you went through a two-week induction you
should know what you have to do.
Despite all the formal procedures, problems persist, variations in conditions persist. Consider
this exchange about galley work at sea:
Worker 1: I think people need to also understand it's a vessel at sea so the sea state
affects people's work as well, particularly in the galley, in every way.
Facilitator: What sort of things?
Worker 2: Boilers. The boiler pots didn't have safety release valves on them or
pressure gauges. No latches on oven doors, so when they're open they
just swing around like that.
As to the question of enforcement, there will always be problems when so many
commentators if not managers regard safety disputes as trivial. As another seafarer said:
I think everyone would agree that they've had this situation occur where at the end of
the day we're demonised but all we're doing is saying hang on there's a standard
here. Just like there's a quarantine standard there's a safety standard and we need to
comply. So we are demonised because we actually say something.
What can also be discerned here – and seems to be the fundamental issue in workers’ minds –
is concern about where responsibility lies in the production and contracting chain. A maritime
union official sums up the workers’ perspective on this vital matter:
17
Every company that goes onto the project have to have their own workplace
policies ... but sitting right at the top of all this you've got Chevron's policies and
procedures. They've got a safety management plan that ties in with the project
managers' policies and procedures and that for most of the contract is this KJV, or in
some cases you've got SLC, which is part of the Leighton's consortium on the project.
So they're the two main principal contractors working on the Gorgon Project and
then you've got the sub-contractors that work below that. In the case of Patrick
Projects down at the AMC, you had a fourth layer in there, because you had a
company called Agility that had the contract with KJV. So you had Chevron at the
top, KJV, you had Agility and then you had OMSA, who were the employer before
Patrick Projects took over. So you had four different companies involved. You had
four policies and procedures that applied to Occupational Health and Safety.
This leads to the next general issue – the complexity of the contracting arrangements.
5.3 The contractual arrangements
The Gorgon project, like any megaproject, has many contactors and sub-contractors engaged
on the work. Stevedores reported many frustrations over policy inconsistencies and daily
work practices. This focus group exchange exemplifies many of the issues they were raising:
So [planning] goes through four carriers, then - Patrick, Agility, KJV, Chevron and
then back from Chevron all the way back down the line.
You forget about the insurance as well. When we were loading the barges, the Combi-
dock, we had all of them guys all playing their part but then all of a sudden the
insurer comes along and says, hang on a minute, it's not lashed the way that we want
and we're not going to allow it to go until it's done our way.
Which turned into our fault.
Yep.
18
Because we were told by KJV how to lash it, and then all of a sudden the ... Marine
Surveyor comes in and says, no I don't want it that way. We said, well we asked for
the lashing plan; this is the lashing plan that we got; we lashed it to the lashing plan.
Then they say no. Sometimes it's a half a day going over it ... re-lashing the job again.
Sometimes it's a day.
Then they'll pull another crew in to help them or a certain amount of guys to help
them deal with it.
Others reflected on the same matter and pointed in so doing to another issue, the relative
inexperience of some of the newer contractors:
So instead of getting a better system they just tell people to cut their manning. So
we've suffered a bit with that and no doubt suffer it again shortly in terms of kicking
people off the job. But they're getting rid of the planners, the managers, even the guys
that actually could do the job, they're getting rid of them. So they're getting to a point
where there's hardly anybody there who can actually plan a vessel.
There were wider concerns about inconsistencies within the project around the application of
safe working procedures, once again arising from the complexity of the project structure:
... like the quarantine stuff, Chevron have their own safety policies. I mean, they set
them. They're set out. We talk about it at the inductions. They're drilled into us. So
they can't expect a vessel to come into the country and for it not to operate according
to our own policy, so it's an absolute nonsense when this sort of stuff goes on. The last
- the vessel I'm on at the moment, Chevron had a look at it. Everyone had inspected it
in Singapore before it came. Now they have .... standards, safety standards,
quarantine standards, et cetera, et cetera. They cleared it to come down. Obviously
it's not going to get anywhere near Australian standard, Chevron standard.
These observations are indicative of more general concerns about the structure of contracting
arrangements.
19
6. Delays at work
Much of the material present thus far goes some way to explaining delays in the project’s
timeline. In addition to that evidence, the focus group discussions revealed many instances of
unproductive practices, stemming from various levels of the project’s management.
6.1 Unloading and re-loading
Stevedores repeatedly claimed that ‘lashing’ and ‘re-lashing’ materials were causing very
significant delays at Henderson. As this example reveals, workers also claim the plans for
how to stow the cargoes are often changed and re-changed:
I mean they had barges where ... the stevedores are saying ... no you can't load that
on there because the deck loading - it's not loaded for it. They're going too high and
they're saying, no no no no, that's all good. But you can't lash it when you haven't got
enough lashing stuff.
So you load the barge too high.
So everyone, right through the gang, we've done a health assessment of it and they
say they’ll have a meeting so that goes through all the things and they go over and
have a little meeting and then come back and go, no it's all good. Then in the
meantime we're saying, well while you're having a meeting instead of us loading we
can just keep on the lower tier so that if you have to take them off we don't have to
take them off the top so it's no double handling. Then what happens is that you go
away the next day and you come back and they're unloading it because we were right.
I think it's important to also state that the stow plans for some of the barges and the
vessels, sometimes it wasn't unusual for the stow plans to change up to three or four
times a day.
The workers were asked whether this was common practice on the waterfront. They denied it
was a usual practice: 20
Facilitator: Are you used to this on the waterfront?
Worker 1: If they were working over the road here for Patricks in bulk and
general or ... one of these mobs, you would be just dealing with a port
captain and your own plans within your own company.
Worker 2: Yeah. The planners get together normally just say - I did a little bit
over here when I was with DP World and all that, they sent me off on a
week course over Easter and that. What they used to do is get all the
planners together and everything else. Before the ship's even berthed
they got the sequence sheets worked out.
Worker 3: So that's what stevedoring companies do. It's what they're good at ... If
they get to a point where they can't sequence what's going on a
vessel ... they're doing something wrong.
In some cases, the workers attributed delays to the performance indicators used to manage the
project:
There was a stage where we were double-handling and triple-handling stuff ...we
were actually loading stuff and taking it off for the trailers coming in, putting it on the
ground and then another time, we would pick it up from a trailer, then we'd take it off
the trailer and put it back on the ground.
6.2 Cranes and wind-speed
Several workers complained that time was wasted at Henderson because of the limits on the
use of loading cranes in winds. In their leading-hand logs, stevedores consistently noted that
no work could take place because of wind. They maintain that the rules on wind speed were
unnecessarily restrictive and that it took over two years for all the commercial parties
concerned to get agreements from the manufacturer to change the speed for crane operation.
It is worth emphasising that it was the workers themselves who considered the limits
impracticable because of local (windy) conditions and sought to have them changed. Once
again, an exchange between workers is presented verbatim to tell the story to best effect:
21
- Well everyone was complaining because the cranes are rated for like 14 to 16 metres
a second, but the Chevron policy said 10. So all the cranes around us were working…
- And we're stopping.
- …and we're stopped.
- Because Chevron's told us to.
- …saying, what did you stop for?
- But they were still [unclear] jobs when they were outside the contracted role…
- So even though the crane's good for another four to six metres a second higher…
- Guaranteed by the manufacturer.
- Or even some of the tower cranes and all that, say 20 metres a second extra.
- KJV, Agility, even Chevron, they're with their own safety blokes. The only people
there that are trying to make the job work is us. We'll have KJV come and stop the job
and we'll say, well listen…
- …here's your procedure. How could we do - you tell us how we can do it and comply
with this stupid procedure?
6.3 The birds
One episode recounted with much glee suggests that the vagaries of nature have caused
significant delays and, although, as the end of the story makes clear, little addition to capital
costs. As has been explained earlier, because Barrow Island is a nature reserve, all material
shipped from outside has to be quarantined. This can go awry in sometimes remarkable ways:
- We had a couple of barges that were doing the rounds and they were on the anchor
just out from us. When they brought it all in, the [whole quarantine] knocked back
the whole barge because of the build-up of…
- Bird shit.
- Bird shit on it.
- So we had to take off all the containers, hundreds of containers off, go through the
system, get them all washed and cleaned and…
- Reloaded.
- ... remediated and reloaded ... the whole barge. Probably a couple of hundred, at
least, roundabout.
22
- ... we took them all off, put them in the yard, went through the wash bay, gave them all
a hose off…
- Cleaned the barge.
- Cleaned, inspected.
- Cleaned the barge, rewashed the barge down.
- How long did that all take?
- It takes a day to wash the barge, probably two or three days to...
- Yeah, you're probably looking five to six days turnaround from...
- They say there's money in shit though, don't they?
- ... but it came to a point where KJV ... was talking about how they could get
something to cover up the barges when they were out on the berth so they don't get
bird shit on them, because they've been sitting there that long, they've got to put that
so that they can do some sort of - it's just a problem that always happens, I suppose.
7. Unproductive work practices
In the course of the research, workers produced many stories about particular aspects of the
job which, they argued, were examples of delay or waste and which, combined, might begin
to explain some of the problems with the Gorgon project. Much of the discussion of Gorgon
says or implies that workers are to blame for poor productivity. Here, that claim is turned on
its head.
7.1 Company policies which undermine efficiency
Workers employed by contractors in the assembly area at Henderson, assembling and
preparing materials for the construction site on Barrow Island, discussed that what they saw
as bureaucratic imposition of rules was both inconsistent and obstructive. In this example, a
skilled and experienced boilermaker complains about how these policies in response to a
mistake by a trades’ apprentice (TA) interfere with his own work:
There was a TA - an electrical TA cutting a piece of steel with a cutting disc who had
his shirt hanging out and the shirt caught on fire ... the guy suffered some fairly bad
burns. Now from that they've banned all cutting discs. I'm a tradesman, I'm a
23
boilermaker tradesman, I have been for x amount of years. So what they've done now
is if you are trying to make something ... I would grab a grinder. I would put a cutting
disc in it and I would cut the end of it off. Now you can't do that. So they are saying
it's a safety issue. So I would have to either go and get a sabre saw or the oxy or
something like that. Sometimes the guys leave the oxy empty sometimes, sometimes
not, so then it's got to be filled so it's more time.
Grid mesh, you cannot cut a grid mesh without a cutting disc; you cannot. The guys
out there doing pipework ... when they put the pipework together they put bullets in
them, what they call bullets, a bit of steel and a tap at each side so it holds the pipe
together. They couldn't cut them out. They were trying to get them to cut them out
with a hacksaw at one stage.
Like I said, I've been in the game a long time. I'm not allowed to go and get a cutting
disc and cut a bit of steel off yet they [apprentices] are allowed to go and get - a
second year apprentice, who's a pipey apprentice, because the pipey is allowed to use
a cutting disc now, to get him to cut it as long as it's round.
7.2 The imposition of locally inappropriate policies
Among the skilled trades-workers at Henderson, one of the most commonly discussed
incidents arose from policies surrounding the wearing of safety harnesses in the assembly
workshop. In this exchange between these workers, recorded in one focus group, this story is
told. It reveals the basis for the workers’ claim that the safety policy being deployed is not
only inappropriate but unworkable. The worker are discussing a safety harness that makes
sense to them when there is no other protection for workers up on scaffolds but, they say,
makes no sense in Australia. In fact, they claim, they are pointless:
- In America ... what they've done, because somebody ... fell off an incomplete
scaffold and hurt themselves, is they said that everybody throughout the world has got
to wear a harness on a scaffold.
- Every ... employee has to wear a harness ... even though the scaffold in Australia is
built to Australian standards and the ones that we're working on are completely
24
enclosed [unlike in the USA]. So they've got all ledges and then they've got mesh and
stuff on the outside. So you couldn't fall out of it…
- You couldn't throw a cat off them.
- No matter what you did ....
- But what that does means that every tradesman, before he can go on that scaffold,
has got to go find a harness, put it on; he doesn't even have to have a lanyard, he just
has to have the harness on.
- The reason behind that is if you're about to fall off ... we can rescue you.
- We can pluck you up [with] the harness.
- The funny thing about it is … a guy [from another contractor] can come along, he
can get on that ladder, get up there on the scaff, but you can't; you've got to have that
harness on.
- The contractors that do the insulation and the painting .... lagging and insulation.
They don't have to wear one.
- Because [our employer] ... made a decision globally .... [although] our standard of
scaffolding, English and Australian standard of scaffolding is higher than the
American standard.
7.3 Unnecessary paperwork – cost and delays
The workshops are the site of assembly work where the workers say – as in other workplaces
– complications and flaws in the production system inevitably arise. However, they felt that
this case was unusual because of the added layers of administration which, they claim, slow
the work up. In this instance, a skilled trades-worker explains how the simple matter of
having access to the right bolts had been made unnecessarily complicated:
Normally when you're putting up structural steel you have a bin with all the different
sized bolts in it and you put the bolt through, [but] that might be a bit long, so you
just take that down and go down and get another bolt, put that in there, that's the
right size so we'll use all that sort of bolt. You've got a bolt list as well that tells you
the right size bolts but sometimes ... [the] bolt looks wrong, put the right one in.
What they made us do [on this job] is you had to go to the - to your supervisor, saying
I need this many bolts. Then he had to go and see the engineer and get it checked off
25
with him and then you had to - then he had to go down to the store with the
supervisor, open the door and make sure you've got the right bolts. Then you've just
got a bag of bolts for just that job. That is different because normally you just have…
a box of bolts.
The cheapest thing on the whole job and normally you'd just have big bins with all the
bolts in them and you just go down and help yourself, stick them in.
That was early on in the job and it lasted for about four or five months but they lost a
mega amount of time. As it went on they finally let you get access to the bolt store,
the supervisor got access to it and then he could go in there and say oh well, we've
got this job, I'll get two boxes of this ... but you still don't have a bin like you normally
have on normal jobs.
7.4 Not abiding by supplier specifications – cryogenic units
Air Products, one of the companies that supplies equipment used in freezing LNG has, as one
would expect, conditions around its warranty. Trades-workers employed to fit out these units
at Henderson explained what happened when, according to them, a local representative of the
supplier instructed the contractors how to ‘torque the bolts to a certain degree’. This
exchange among the workers in one focus group reveals what they believe happened next:
- [One of the major contractors] ignored him and said just go ahead, we'll do it the
way we want to do it. So then what happened is he went back to [the USA] ... and he
said they haven't torqued them to the right specifications ... So then it [news] came
back from Houston: ‘you've got to do it because we won't get the warranty if you don't
go back. So then they ... had to jack it up, put it on the SMPs [self-propelled modular-
trailer] and take it down to the ... big rolling shed, stick it in there, rescaffold it, take
the lagging off, take all the bolts out, retorque them all and then put it all back. That
took five months.
- ... Nobody knows how much that cost.
- Plus the thing they stand it on, that wouldn't be cheap to hire because it's like a big
bed with all these wheels on it…
- Self-propelled ....
26
- It wouldn't be cheap to hire.
- There's $30 million there.
- So that was all because they didn't listen to that guy [who] told them to torque them to
these specifics and they didn't listen to him; they just went ahead and did what they
wanted to do.
- Five months to refit it?
- They had to pull all the lagging off and get in there and change all the bolts.
8. Getting the most from the workforce
It is unsurprising that the workforce do not see themselves as the problem. What is striking,
though, is that the workers who were critical of so many aspects of the project were also
committed to their jobs. This emerged in two ways in the focus group discussions: the skills
and tacit knowledge the workforce have to offer; and the ways in which they take pride in the
job.
8.1 Using the workers’ skills
The interviews and focus groups revealed deep tensions around the way in which work was
being organised, with many claims being made that the skills of experienced workers were
not being harnessed.
This came through with all the groups of workers examined here. We can begin with one of
the stevedores:
The experience we have down there with a lot of the guys with many, many years'
experience. We know how to lash things on boats, whether it be a ship, whether it be a
barge or whatever. We know how it should be done and we're told to do it a different
way.
And another:
27
That's what's frustrating for the boys when they say, look, we know how to do the job.
We'll make you look good, no worries. You don't know what you're doing. We all
know how to do it. Leave us alone and we'll do it. They just want to tell you how to
do it, make you do it this way.
Similarly on construction sites:
The old days when you ... used to have site managers and project managers that have
at one stage worked on the tools and they've worked their way up. They've got the
respect of their employees, they know the job, they understand the industry and they
know that we're dealing with people as well. We're not machines. But they also
actually know how to build. What we're finding is at Barrow Island there's a lot of
people that have - they're probably quite intelligent, I don't know, but you probably
wouldn't know actually talking to them that they are.
As for trades-workers in assembly, the frustration with the contractors’ engineers wasting
their own time and money was marked:
I've had one of them come out to me and give me three [drawings] to do one job.
Every time I marked it out it was wrong; he came back three times and gave me the
right drawing in the end. He was working it out and I could have worked it out for
him to start with. That's just - that's how we've got to follow the protocol. You wait
for the engineer's approval and ... so it just slows the job up.
This, too, played out in claims of unnecessary organisational complexity:
But part of the industrial relations complexity of Barrow Island is not just the fact that
you've got people that don't know what they're doing, but you've also got the third
party KJV that wants to stick its nose into the relationship between the employee and
the employer. Every bit of correspondence that the union sends Gorgon contractors
in relation to the Gorgon Project has to go to KJV. That's part of the contract that
KJV has with the employer.
28
In short, the most deep-rooted elements of these tensions were expressed thus, by one leading
unionist:
They [Chevron] see us as being irrelevant to their business operations, as opposed to
constructive input that we could've had that probably would've saved them tens of
millions of dollars if not hundreds of millions of dollars.
8.2 Shirking on the job?
All the discussions with workers came to this matter at some stage. It is an important question
because much of the reasoning about delays sheets the problem home to lack of commitment
to the job. It has even been suggested, as was noted earlier, that workers were deliberately
‘going slow’. A rationale is often suggested for this, albeit disapprovingly, that working
slowly keeps the workers employed in these jobs.
In truth, the seafarers were proud of their work. A supervisor makes this clear:
Getting a good job is always a good thing because it gives you a bit of pride. The
boys are happier, they can see a bit of improvement [on the ship]. I normally allocate
the jobs to who I think is capable of doing that sort of job. It might be the bloke who
can't even do up a spanner or a nut so they can [put a bit on the] on a paint brush.
But other people will construct things, build things, modify things just to improve the
whole boat more or less. The skipper of the moment will come down ... ‘that's really
good you know’. You feel good about it. It gives you a bit of satisfaction knowing
that you've done a decent job and things like that. So everyone appreciates it so it
makes you feel better.
Being at sea makes commitment to the job more, not less, a feature of work:
Working at sea, it takes so much time from your life. You... end up almost defining
yourself as a seafarer. So if you work's shitty then you're probably not a great
seafarer.
29
No-one put all these concerns better than this worker for whom it was not just about this job,
or the next but something bigger still:
It's really important that we do our job really well. For me personally I believe that -
we just have stewardship of our jobs and that our jobs will then go to the next
generation of Australia seafarers, that’s what I believe personally. I believe that we
have a culture of this so I'm very driven by that. That's why I get involved as often as
I can, putting as much effort as I can because I really firmly believe that. For me this
isn't just about a job. For me this is part of my work culture if you can understand
that.
9. Conclusions
If the delays and cost pressures in the resources sector and, in this example, on the Gorgon
project are to be properly understood, then, plainly, the issue that needs to be understood is
causation and, with that, remedy. Most of the discussion thus far in Australia itself has
concentrated on labour – be it labour law, labour unions, labour costs or labour effort. This is
more of than not the case whether it is LNG, the resources sector or even low-wage
industries. In this case – and this is part of a wider matter – there are problems with most of
these criticisms. Not only are wages a small part of the costs, but most of the figures used in
public debate are misleading. The massive blow-out in costs simply must be explained by
other components of the project. Part of the answer is in fact the other much-discussed
problem: delays. Obviously enough, as with other megaprojects, delays in themselves are
expensive.
Even if the details of the dominant narrative about Gorgon could be substantiated, then
‘fixing’ workplace relations – be that through legislative change or attacking the MUA –
would not solve the problems. The logic and the end-point of this submission is, instead, to
insist that focussing so heavily on ‘labour’ is part of the problem: that mindset is, in itself,
evidence that the real issues are simply not being addressed. To repeat: if this mindset occurs
in site after site then we have not only a management problem but a public policy one – albeit
a very different one from how it is usually framed.
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Four major conclusions flow from this investigation:
1. In the context of the general problems that plague megaprojects, there should be
further investigation of the claimed problems with resource projects. This
submission details many incidents – both major events and daily episodes – that
suggest a pattern which begins to explain delay and cost. These and other aspects of
work on megaprojects deserve closer interrogation: the nature of the contracts; the
relationship between Chevron and those contractors; the ‘red tape’, imposed, not by
governments or unions but by relationships within the construction and production
networks; arguably, lack of incentive to complete the project.
2. Workers regard Chevron as having the responsibility for the contracting chain and,
ultimately, the costs and delays. Having set up the structures to manage the project
and deliver the gas, Chevron is best positioned to inquire into and address the
problems in the project. Whoever a direct employer may be, project principals must
be held accountable for all aspect of the work.
3. There is scope for a dialogue between workers, their union representatives and
project managers. A persistent feature in how workers themselves analyse the
project’s problems is the claim that time and money could have been saved by a
closer engagement with the workforce. The workers are keenly aware of the media
accounts which play up ‘capital flight’ – the claim that investors and resource
companies will take their business elsewhere if they are unhappy with local
conditions. Those workers do not want to see that happen.
4. The commonly accepted assumptions about the problems on the project are so
unhelpful that they must be addressed. It is in the interests of shareholders and
investors, workers, managers and policy-makers to have a better informed discussion
of the issues.
Having undertaken this research based on in-depth discussions with those on the frontline, it
is apparent that there are scores of stories from the workforce which are suggestive of 31
inefficiencies in the execution of the project. Combined, they shed new light on familiar
problems.
The experiences of the workers have been presented here with little editorial comment.
However, if the standard explanations for the problems of projects like Gorgon are flawed,
then significant questions follow about how the cost and time difficulties should be
addressed. It follows logically from what is presented in this submission that somehow
‘fixing’ workplace relations will not solve the problems.
The logic of this submission also means that management, commentators and many
politicians need to recast their thinking: if problems are continually attributed only to labour
law and workers, then there would appear to be little prospect of management practices and
contracting arrangements being changed on this project or others. More broadly, and of vital
interest to the Productivity Commission, the evidence suggests two fundamental things: the
nature of workplace relations must be carefully assessed in itself and then its role in
productivity understood as, at best, one factor among many. Blame-shifting and political
point-scoring obscure not just workplace realities but the very questions we should be asking.
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Appendix 1: Research methods
I was asked by the International Transport Workers’ Federation (ITF) to carry out focus group discussions and interviews to examine claims being about the Gorgon project. The ITF met the costs of my research. I gained detailed background on the workforce through recorded interviews with leaders of the three major unions covering the workforce. Contextual information was also sourced from the extensive media coverage in Australia. Company positions are made clear in extensive media briefings as well as publicly available presentations. Employer lobby groups, notably the Australian Mines and Metals Association and the Australian Petroleum Production and Exploration Association are also a rich source for explaining company concerns about cost and delay.
In April 2014, I carried out initial research under a protocol and questions approved by the University of Sydney’s Ethics Office, with anonymity guaranteed (as is standard) to all who participated. Conducted over three days, the focus groups and initial interviews were supplemented by extensive follow-up emails and shorter interviews. After from the contextual interviews with union leaders, the focus groups were undertaken as the centrepiece of the research project, covering seafarers, stevedores and trades workers. All of these meetings were recorded. The audio files were then transcribed for closer analysis. I spoke to a total of almost 40 workers and their union leaders. No claim is made for the groups being a representative sample. Reliability is instead gained from the relationship between this material and other sources – notably the publicly available written sources – and from the unique depth of detail and ‘lived experience’ which statistical data-sets cannot match.
This research method is widely accepted in the social sciences. Interviews allow researchers to draw upon ‘[d]etailed, vivid and inclusive accounts of events and processes’.17 These details recorded upon here would have been impossible to capture without long and detailed interviews and focus groups which privilege the voices of workers themselves. The submission presented large amounts of material verbatim from those sources. This enables ‘the reader to “hear” what the researcher heard’.18
In short, the task of the research was to give voice to the workers on the Chevron Gorgon project to try to answer the questions set up initially about the puzzle in explaining cost and time blow-outs.
17 Whipp, R. ‘Qualitative Methods: Technique or Size?’, in K. Whitfield and G. Strauss, G. (eds) Researching the World of Work: Strategies and Methods in Studying Industrial Relations . Ithaca: Cornell University Press, 1998, p. 54.
18 Reinharz, S. Feminist Methods in Social Research. New York: Oxford University Press, 1992, p. 39.
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